Taking care of our grooms

As more equestrians pay attention to the business aspects involved in running a successful equine-related company, the issue of staff management has come under the spotlight. This is a particular concern when looking at the matter of grooms’ reimbursement packages.

As an employer, it’s important to consider the future welfare of those who work for us, especially since many of our employees haven’t had the benefit of a solid financial education

Retirement planning

For many grooms a steady job is the most they feel confident to ask for in today’s economic climate – StatsSA currently sets unemployment figures at 25%. However, as an employer, it’s important to consider the future welfare of those who work for us, especially since many of our employees haven’t had the benefit of a solid financial education. In a lot of cases, the men and women who care for our horses face a gloomy future once they leave their careers in the horse world, and considering that yard work is gruelling manual labour, this may be sooner rather than later.

HQ recently spoke to Deon Vermaak of FinClear about the products available for our blue-collar workforce. Finclear is affiliated with various service providers for a range of group risk, provident fund and retirement structures, namely Discovery Life, Old Mutual, Liberty, Sanlam and Momentum. Several products have been designed specifically for industries such as agriculture, pharmaceuticals, petrochemicals and mining, where lower income brackets often mean that long-term planning is not prioritised.

Affordable options

“Sadly grooms seldom get a pension – they simply can’t afford it,” Deon starts. “In many instances, once they leave their jobs their prospects are very poor indeed.” He advises employers to discuss retirement plans with their staff and encourage them to look into some of the affordable options available.

“You don’t have to be a formal business to help your team access these products,” he adds. Most stable yards are run as close corporations, while many grooms are employed by private yards with just a few horses. With this in mind, advisors such as Deon have been pointing people in the direction of provident funds or group retirement annuities as manageable investment options.

“In a provident fund, the minimum monthly premium is R150 per member,” says Deon. “This benefit can include life cover, disability and a family funeral benefit. Should the member leave his place of employment, the funds are accessible.” This particular fund needs a large take-up to be implemented, so it’s ideally suited to larger yards or in areas where several yards pool together to provide cover for their collective teams.

For smaller concerns, Deon suggests the group retirement annuity. “The minimum monthly premium is R250 per member,” he says, adding that many employers opt to introduce the product as a type of salary increase in which the employee pays half the premium, while they cover the balance. “It’s a simple way to save,” he continues. “If the value is below R7,000, the funds are available to the member in cash. Should the amount be in excess of R7,000, this will be retained in the investment with growth until the member reaches the age of 55, thereby ensuring that the member has funds available for retirement purposes.” Aside from retirement plans, funds which are drawn out can also prove to be useful for home loans or education, which might ordinarily be out of the reach of this income bracket.

Explaining the process

Deon explains that the application process is simple – grooms submit their work permit and identity document or passport and the debit order is deducted from the employer’s account. However, he says that it’s useful to spend time explaining the concept in more detail. “We prefer to meet staff members to give them an illustration of exactly what happens to their money and how much they’ll get out.” Since financial planning is often an unfamiliar topic for many new contributors, this can be a useful way to settle concerns and also to educate about other areas of interest, for instance life cover, saving plans or hospital plans.